Attending Elysian’s Great Pumpkin Beer Festival was one of my favorite events.

I’ve been working in the beer business in Oregon for nearly 14 years. I’ve watched the last craft beer bubble burst and rebuild in the late ’90’s and early 2000’s. I’ve watched the new wave of exciting breweries grow along with their newly craft aware beer geek fans. I’ve been a part of building those brands while I’ve witnessed the struggles and declines of the big macro brands. I’ve been intimately entwined in the beer world for my entire adult life. I’m very aware of the fact that beer, even craft beer, is a business. But in many ways, it’s different than many businesses. It’s a business built on an ethos.

Educating brewers and consumers about the diversity, flavor and quality of beer

Improving the economic health of American craft brewers

Working to build a collegial community of brewers, homebrewers and brewing enthusiasts

Promoting ethical and legal trade practices

Building relationships and collaborating with our industry partners

Small vs. Big/Local vs. Not Local/Corporations vs. Independent

Some may say this post will come out of the present small and local mania that currently infects craft beer. And I’ve selected “infects” intentially. Anyone who’s discussed this topic with me has heard me say words similar to: “small isn’t necessarily good nor is local a synonym for quality.” For me, the quality of the product trumps everything. Well, almost everything. Too much bad beer is happily consumed because its number 1 trait is proximity. And if you’ve spent 5 minutes on my blog, you know my passion is for Belgian beers and other imports which should prove that it’s not a local vs. far argument I’m trying to make.

Nor is it a small vs. big argument. Many people bag on Sierra Nevada because it’s been successful and grown to a very large size. Yet to my mind, they’re still a fantastic brewery making really great beer; and most importantly, they’re doing it ethically. I still regularly spend money buying Sierra Nevada’s beers including their Pale Ale. There are some really great beers being made by small breweries too, but there’s a lot of bad beer that’s given a pass by consumers because it comes from a glorified garage.

I’m not even against corporations or corporate ownership of craft breweries. I regularly wrote in favor of the Duvel-Moortgat acquisition of Boulevard Brewing. Duvel-Moortgat has been a great steward of quality and helped their breweries reach the next level in both expanded destination and increased quality. I’ve even spoke in favor of SABMiller’s stewardship of brands like Pilsner Urquell which has seen a drastic improvement in quality; including cold express shipping and brown bottles.

The Responses

There are many responses on both sides of the argument every time AB-InBev gobbles up another independent brewery.

“I’m sure they have a contract that protects them from too much interference…”

Whether or not these type of clauses exist, the reality is that Elysian or 10 Barrel or whoever the next victim is is the property of Carlos Brito’s AB-InBev. If you don’t know who Carlos Brito is, you should. He could be one of the most dangerous enemies craft beer has to face. At age 54, Brito has risen up the ranks starting at Brazilian brewer Brahma to become the leader of the largest beer company the world has known – AB-InBev.

Since he became CEO, he shut down Manchester’s storied Boddingtons brewery. Then he went after the revived Hoegaarden brewery; threatening to shut it down until massive local protests forced them to reverse the decision. Long time devotees and consumers noticed the quality decline almost immediately. Once all the profits had been wrung out of the cuts, share prices plateaued in 2008. Then came the hostile take over at Anheuser-Busch.

Ask Lando Calrissian how that deal he made to keep the Empire out of his Bespin mine worked…

The bloodbath at AB ended with nearly 1,400 people getting axed. Again, profits soared. He’s also cut the quality of materials like packaging, rice, & hops. He’s cut back so hard that he’s even put several of his traditional suppliers out of business. As the CEO of a publicly traded company, his duty is to maximize profits for his shareholders. Unfortunately, the only way he knows how to do it is to get out the cutting knife. (You can read more about Carlos’s rise and his techniques in this Bloomberg Business article).

“This will be great for their expansion and distribution…”

This is very true. This will be great for Elysian’s distribution as the AB network is renowned for it’s thoroughness. And frankly, that’s the bait it uses to seduce breweries. That’s how Widmer got in bed with Anheuser Busch in the first place. Now AB-InBev owns a major stake in the Craft Brands Alliance; the grouping of Widmer, Red Hook, and Kona. But while it’s good to be part of AB’s distribution chain if you’re owned by AB-Inbev, it’s not good for independents. Recently, AB-InBev has been snapping up its distributors in states where it’s legal. Here in Oregon, they purchased Western Beverage in 2011 then picked up Morgon Distributing in 2014 and merged it with Western. These two acquisitions were immediately followed by a shedding of non AB-InBev brands.

Western and Morgon aren’t the only examples of AB-InBev seeking to circumvent the 3-tier system. Several states have seen their efforts to strangle off competition. Several of these legal battles are linked to below.

And yes, Elysian and co. will see some increased distribution to fuel their volume growth. But where does this come from? With 3,000 breweries in operation and 2,000 more coming on line, available store and bar space certainly isn’t keeping pace. AB-InBev isn’t acquiring craft brands because it believes in the segment’s quality. They’re buying out craft breweries to capture shelf space and profits. Big Red is down and continuing to slide in sales. Coors Light is gaining market share on Bud Light and even out sells it in Oregon. AB-InBev’s former imports are in a steep decline. AB-InBev is losing valuable shelf real-estate. It needs some way to stem the flow; so they’re picking up brands they can take to stores and bars to capture their lost business. That business has to come from somewhere: the competition.

The more brands AB-InBev has to take before retailers; the easier it is for them to decide against smaller and independent brands. And let’s face it, retailers don’t really want to deal with a million different vendors so if someone can bring them a whole host of products that will fulfill their needs, why should they care if they’re only supplied by one mega-conglomeration. Each brand AB-InBev can present is tap or shelf space they’re denying an independent competitor. Distributors and breweries are in a state of constant war when it comes to beer sets and tap handles; and the more weapons you have the more territory you can conquer.

I’m not denying that this is a bad deal for AB-InBev or for Elysian/10 Barrel/Blue Point/Goose Island/Widmer/Red Hook/Kona/the next brand acquired. It is a bad deal for beer consumers. Especially beer consumers in less developed beer markets where the average beer purchaser is just transitioning to craft. Especially when AB-InBev can come in, undercut the competition, and offer half priced kegs of craft beer through the distributors they own, like they did here in Oregon with Goose Island and Shock Top.

“Who cares who owns the brewery if the beer is still good?”

You should. Yes, Goose Island’s Bourbon County is still great. Elysian Space Dust probably isn’t going to change. 10 Barrel Brewing still employs several famed brewers. Right now, the quality/flavor of these brands is what AB-InBev needs to keep its profits growing. But invariably, something will shift and Carlos Brito will bring out the carving knife. You can already see glimpses of this with Goose Island’s main beers and their movement to AB’s breweries. Yeah, the beer is good now, but for how long?

And each dollar that goes to buying those “good” beers goes toward the acquisition of another brand. Each bottle of Bourbon County purchased helps fund the effort to tip the scale in AB-InBev’s favor by helping them fund their fleet of lobbying lawyers:

Do any Google search on “AB-Inbev lobbying” and you’ll be inundated with a massive list of examples not just from the United States but from around the world. So when I say AB-InBev is trying to destroy craft beer, it’s not just a philosophical debate but a real existential concern. Each brand acquired is another nail AB-InBev hopes to put in the coffin of its competition. Why help fund them just because they have a few products people consider “good?”

The great thing about the craft beer world is the amount of good beer options available. As craft beer devotees, we claim to support craft beer because we wanted a flavorful alternative to BMC. We wanted to spend money on a great tasting product that would help fund independent small businesses that actually stood for something. Now it’s time to reaffirm that stance when it actually matters. It was easy to say no to Bud because it was Bud. But now that Bud is Bourbon County, it’s not so easy to pass on what used to be a white whale. Now that you can buy a cheap pint of Goose Island because AB-Inbev is trying to undercut everyone, it’s a little harder to shell out a few extra dollars to support the craft ethos.

It does matter how you spend your money. When you buy an AB-InBev beer you not only fund their continued expansion through brewery and distributor acquisition, you validate retailers’s choice to carry their products. Each ring at a larger store shows up in the data surveys which in turn is used to make presentations to retailers proving the selling ability of the products. This helps AB-InBev squeeze the competition off the shelves, increasing their sales and furthering the cycle.

If you’d like an example, visit Belgium and walk into just about any bar or restaurant. The draft lineup will look suspiciously similar from spot to spot: Jupiler, Leffe, Hoegaarden, and Stella Artois. Walk into a corner market or grocery store and the beer cooler will look pretty similar. Many places I saw only carried AB-InBev beers. If they carried other beers, they were relegated to a warm shelf hidden deep in the back of the store. Even in some very nice bars, AB-InBev dominated the draft list and took up a sizable portion of the bottle list.

Stand Up for Craft Beer!

AB-Inbev keeps getting bigger and bigger. We can give up and just buy the beers because yes, some of those beers are damn fine products. We can say that it’s only quality that matters and feed the beast or we can not. We can make ethical choices and support the thing we all love: Craft Beer. We can pass by the Elysians and 10 Barrels and Bourbon County’s and reach for a beer that still speaks to what we love about craft beer.

It’s great for Dick Cantwell that he built something this valuable. I’ve met the man several times and he’s a genuinely nice person. His brewery was one of my favorite regional breweries and one that I was proud to work with in Oregon. This sale was no doubt good for him and for the expansion of the brand he built. I can appreciate that but I won’t be buying his beer anymore. I’ve purchased many Elysian beers in the past and even took several to Belgium where I used them in a Belgian vs. American Craft Beer Dinner. Not long after that dinner, while I was still in Belgium, I learned about 10 Barrel Brewing. Since then, this post has been forming in my head and was solidified with the Elysian buyout.

I fell in love with craft beer because of the culture, the people, and the product. I’ve earned a living and career working with beer. I go home and I read & write about beer. When I vacation, I visit breweries. I feel that after all that, it’s my duty to say something in defense of beer. My money won’t be going to AB-InBev, in any way. I know I’ll feel a little sad when I walk by one of my favorite Elysian beers and reach for something else, but when you stand for something sometimes you have to make those choices.

To Avoid:

Bud/Bud Light

Busch

Natty Light

Leffe

Stella Artois

Blue Point

Elysian

10 Barrel

Widmer

Omission

Red Hook

Kona

Becks

Bass

Boddingtons

Spaten

Franziskaner

Labatts

Kokanee

Michelob

Goose Island

Belle-Vue

Brahma

Lowenbrau

Oranjeboom

Rolling Rock

Red Bridge

Shock Top

St Pauli Girl

Alexander Keith’s

Corona/Pacifico/Modelo – In the US, these brands are brewed in a facility owned by Constellation, their US importer. This is due to anti-trust laws. I’m not sure if there’s any sort of kick back or licensing arrangement that might funnel money back to ABInBev. Outside the US, these brands are brewed in ABInBev owned breweries.

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90 thoughts on “AB-Inbev: Why It Matters Who Owns The Brewery”

I agree with basically everything you are saying. They are basically an evil empire. I will not 100% stop buying these beer because of the purchase but I will not be going out and trying new recipes. I will still probably pick up a Space Dust or Bourbon county once a year. I just won’t be buying in any volume.

Christopher, I was just about to ask that. I’m no lawyer but at what point does it become a matter a question of avoiding anti-trust laws. It seems like we are dealing with a massive trust and no one is doing anything about it. As a new home brewer, this was a great article! Keep up the good work!

Yes, it does “matter how you spend your money. … you validate retailers’s choice to carry their products.”

I own a specialty beer store. When we first opened eight years ago, we planned to carry even the “big American brands.” We didn’t want to be “beer snobs;” instead, we wanted to have a store that would make all types of beer drinkers comfortable.

Within the first six months we dropped all the (obvious) big brands. Those remaining in our offerings include Blue Moon, Shock Top, and Wild Blue.

I view these beers as “gateway beers” into craft. I’m known to refer to Stella as being “Europe’s equivalent to America’s Bud,” and fully disclose beers as being “corporate” on the sales floor.

Some choose to buy; others return them to the shelf and grab craft instead.

Some are mortified to learn a beer is posing as craft; others argue that it is craft.

Beers that don’t sell within date are removed from inventory and placed as “full case order only” on our books. And still on the store’s shelves live Blue Moon, Shock Top, and Wild Blue.

Next to the latter two are Goose Island. Now, I am left pondering the placement of 10 Barrel and Elysian. Do I place them with their cousins? They’re a different beast, growing up as craft, now married-into the family of AB/InBev.

Some can afford to take a stance and drop a product because of a moral ground.

I understand the business challenge that the folks at Elysian, 10 Barrel, Goose Island, Blue… all went through in need ending funds for growth.

I find myself consoling customers who just discovered their favorite local brand is no longer local.

Shouts and accusations of “boycott!” and “sellout!” ring out. They hang in the air. The cry in support of the small guy, the local brand.

The shouts pierce my very soul.

You see, my little beer store was once thriving. But since Washington State privatized the sales of liquor, the megaliquor chains of Total Wine and BevMo have opened all around.

Total Wine entered the State, guns slinging, running radio advertisements against small business— going sofar as to call the independent owners “snobs.” Their lobbyist has made sufficient effort to assure that small beer stores like mine, who is licensed exactly the same as they, will NEVER have equal rights in this marketplace.

We never wanted to be snobs. We wanted to be all-welcoming. We wanted to use big brands as a stepping stone.

I’m left wondering how to position these great once-craft brands. But, even more so, am left wondering if my store has lost it’s relevancy to today’s craft beer drinker — as such a significant number of them now support the megachains rather than the independents.

Tiffany, good luck to you. Perhaps at this point in the game you should consider going full-on “beer snob”. The independent bottle shops that I frequent, in an area that has has had competition from Total Wine, etc. as well as grocery chain’s offerings, for many years, get my business because they know beer better. They get unusual offerings, they have better selection, they are more knowledgeable and have staff to share that knowledge, and they pay more attention to quality. Total Wine, for all the beer snobs I know in my area, has the reputation for selling old/oxidized/skunky beer. But generally it’s the beer snobs that would notice that, eh? Thank you for doing what you’re doing. Best wishes.

Yeah. That’s a big problem. The change in the Washington system is not working out the way people thought it would. That’s what happens when you let giant corporations right the legislation. It works for them, but against most everyone else.

I choose to think about who is getting my money when I buy my beer. I’m always going to choose the local and/or independent brewer (that is making great beer, nobody should choose a bad indie brewer just because they are indie). Big Beer doesn’t need me. Indie beer does.

Mike,
My understanding is the companies are Molson Coors and SAB Miller everywhere as separate companies . Miller Coors is a joint venture rather than a merger or takeover. It means they combine their respective resources to compete and market against ABI. The joint venture can be terminated easily as the companies are still independent.

I also think that the reality of the situation is that craft beer is the same as any other business. There will be takeovers, both friendly and aggressive. People who have set up great breweries and worked very hard on them for 20 years will want to sell to the highest bidder to profit from their labours and retire or move on.

ABI will always be an aggressive capitalist company. We can only vote with our Dollars, Pounds and Euros. Fortunately we have so many amazing small breweries to choose from, so there is no real crisis of choice like there was in the bad old days.

As I said in my blog about it, I don’t hate the owners of Elysian for selling their company. I understand why they did it, but am very disappointed. I also understand why people are angry and will boycott their beer and bars. I will probably find one of the many non “Macro-craft” brands to enjoy, and buy the odd bottle of Spacedust when I can. The level of hatred against the owners of Elysian on Twitter is too much. They are not evil or traitors. Let’s keep it in perspective

I agree with you totally. I’ve met the owners of Elysian on many occasions. They’re good people. Dick Cantwell is a genuinely nice human being. I’m sure this is a great deal for them personally as someone who can both be happy for good people, I can also be sad for the sale of one of my favorite brands and boycott that brand.

I write to a much bigger audience than just the US. Canada, Belgium, and the UK are big followers. This list was meant to encompass a large portion of the brands in my reading audience. And I’m sure they’re still getting a cut in some form.

Thanks for helping me resolve to purchase craft beer more ethically. I’ve been trying for awhile, but I’ve thought of Goose Island’s non-ABI-brewed beers as something separate. I won’t pass up the Matilda Lambicus next time I see it, but I will be a more diligently ethical craft beer drinker.
What about breweries such as Fordham in which ABI owns a stake as distributor?

Yeah. That’s a big problem. The change in the Washington system is not working out the way people thought it would. That’s what happens when you let giant corporations right the legislation. It works for them, but against most everyone else. And in most cases, the distributors are independently owned as well.

Have you seen this map? I see that A-B/Inbev’s “minority” stake in Fordham is actually 49%! Guess I won’t be drinking Fordham beers anymore, which stinks, because that also means avoiding their local Ram’s Head bars, which are some of the best beer bars in the area. That also means swearing off the reincarnated National Premium dry pilsner that they contract brew.http://ithinkaboutbeer.com/2015/01/27/ab-inbev-why-it-matters-who-owns-the-brewery/

“I’ve even spoke in favor of SABMiller’s stewardship of brands like Pilsner Urquell which has seen a drastic improvement in quality; including cold express shipping and brown bottles.”

It is funny that you say this, as many people over here (Slovakia, but also Czech republic), see that as a turning point towards downfall of the Urquell in terms of quality. That is roughly the date when it went from being 12°P to something like 11,5°P and dropped stating that information on label, among other things. Unfortunately I am too young to remember the “old one”, but this is the general vibe over here.

So I guess a lot depends on perspective, even in terms of which side of the ocean you are looking from 😀

Very true. I only knew Pilsner Urquell as a tired and mediocre lager. After SABMiller started cold/express shipping, I could see what the beer was really about. I’ve even had some of the Unfiltered PU, which is pretty darned great. But then, I’ve never had it in Plzen prior to the buyout.

The author nails every point. Proximity is not a measure of quality. Goose Island’s base beer line has dropped significantly in quality. If people knew who Carlos Brito was and learned his operating history they wouldn’t trust AB Inbev to keep his hands off these craft brands for a second. Dollars spent on AB Inbev brands are just fuel for the next purchase.

I hope this article gets as much circulation as the one on Jim Koch a couple weeks ago, it’s more important.

The good news about all of this is that, due to the craft beer boom, there are so many other independent breweries to choose from! Stop adding fuel to a fire that would see craft beer burned to the ground, people. Stop with the consumerism nonsense that helps you rationalize buying that Goose Island or (now, sadly) Elysian special release. Start thinking long-term.

I am glad that this article seems to be making its way around my various feeds. Though I haven’t always noticed the effects that the big beer lobby has on states, it is good to see everything well-presented and well-argued. It certainly changes my tune from “Well if it makes good beers widely available then it can’t be all bad.” I have it so good in San Diego with wide availability that it is only when I travel to other states that I realize how things could be if we didn’t have the advances of the last few years. I certainly would appreciate seeing similar setups everywhere, where you can visit breweries and buy beers directly without issue. In many places the only place you can have a pint is a brewpub or a beer bar.

There’s a ton of great beer in San Diego. I’ve enjoyed my trips there immensely. There are a lot of states, I’d probably say a majority, where it’s hard to get a craft brewed beer. Fortunately more state legislatures are seeing the light.

Great article. I agree with pretty much everything that is said here. For me, it is not hard to avoid these brands, as there is a lot of other options for craft beer drinkers these days. I value the variety that is created by the presence of many smaller producers, so I choose to support them instead of the corporately owned, massively distributed brands.
This is not just a beer thing, either. It happens in almost every industry. Companies like WalMart, Kelloggs, Cargill, ConAgra, Kraft, Pepsi, and Coke are constantly buying up ‘organic’ food producers and small-ish farms, and presenting them to the public as locally owned, healthier options.
The only way the consumers have a say in such things is to be informed, and choose where they spend their money. By knowing how AB InBev behaves, and what they own, it makes it easier for folks to avoid their products, and buy something that is truly local or ‘craft’. In the end, this support will help keep a wider variety of products available, which is a good thing.

Just for the record, Dick Cantwell is a minority owner of Elysian; he opposed the sale to ABI, but his partners outvoted him. He has been outspoken about his heartbreak over it all, and should not be held responsible for the sale in any way whatsoever.

Great article about what really happens when Brazilian-run
InBev comes calling. Your number of “original” A-B employees terminated is actually over 2100 and counting with recent mass terminations in December 2014. Not only did they cheapen their brews via rice and hops cut-backs but also barley-malt of the cheapest variety and to hell with 2row/6row blends. Then there’s the number of days Budweiser spends in the fermenting cellars reduced from six weeks to three and one-half…..enzymes anyone ???

My advice is READ THE LABEL. If you think you are buying Honkers Ale from Chicago’s famed Goose Island, or the 312 Wheat you may be surprised that it is brewed and bottled in Baldwinsville, NY. If the 10 Barrel beer still says Bend, OR, or the Immortal I PA says Seattle, WA it’s probably safe to bet it was brewed by the guys who earned all the medals.

If it was brewed somewhere else, by somebody else, it is at best a clone beer. Like my Bruce Drool is a clone of a recipe for Moose Drool. Woof.

Thanks for the comment! And while that’s generally good advice, in this instance even if it’s brewed in Bend or Seattle the money still goes to the same place and that place isn’t a world were the craft beer business is made better.

This is the best assessment I’ve seen yet of the AB-InBev craft acquisitions. I couldn’t agree more that they have already begun to try to shift the market away from specialty stores where choice is king to high volume outlets with relatively limited shelf space. Think Walgreens. If AB can convince you that there’s everything you need at your local supermarket, from the Tuesday night sixer of Goose to the ultra rare BCS coffee – then they’ve succeeded.

Other than the BA, I do not know any other financial entity or mathematician that believes 32% is a majority stake. CBA is a publicly traded company NOT owned by AB/InBev. After so many years it is clear that consumers really do not understand the agreement between CBA and ABI.

ABI is the largest shareholder at 32%. The two Widmer brother’s combined have around 20%. This is according to their shareholder’s report which is available online. You’d have to be naive to think ABI as the largest single shareholder doesn’t exert a massive amount of influence. Plus as a shareholder, money spent on CBA products will eventually, in part, end up in ABI’s coffers which will go towards the further ABI’s goals of stifling competition.

Love your article, couldn’t agree more with every thing you are saying. Appreciate the way you are informative without coming off condescending, get more of a disappointed/bummed vibe about breweries joining the Macro.
Question for you about other Macrobrews that I’ve been thinking about. What are your thoughts on Constellation and Heineken. I’m torn about the half sell of Lagunitas as they are a top tier beverage in my books and I know a lot of people enjoy Ballast Point. Are these two Macros doing the same crap as AB? Are the foreign publics view the same of these Macros as we are here in the states towards AB?
I believe in the greater good of craft, like you were saying and do not want my money going towards anything that helps weed out the small micros that I’ve come to enjoy.

You left out Saint Archer – owned by an A-hole and now owned by bigger A-holes. And Golden Road in Los Angeles. I was just getting to know them, now no more. Being in San Diego, the Ballast Point sale was brutal. I haven’t written them off because it’s not AB/InBev, but still a shame, though tough to blame someone caving in to a billion dollars. I’m hoping they have the fortitude to maintain their quality. Hell they started as Home Brew Mart right around the corner from my house.

Some kudos to Stone should have been made. I’m sure they’ve been offered obscene amounts of money to sell out and as far as I know they’ve stuck to their guns and hops.

Great article. But you are very wrong about the relationship between CBA and ABI. While yes, ABI is the largest shareholder, they have zero to say about day to day operations. Yes, any realized profits from CBA will trickle down to ABI, but it is irresponsible journalism to lump Redhook, Widmer, Kona, etc brands with the likes of Bud Light, Shock Top, Goose Island, or any other brand that is brewed, marketed, or sold by ABI.

Even $0.32 out every $1 of profit is too much to direct towards AB-InBev’s effort to stifle competition. CBA, whether they want it to be known or not, are partially part of the AB-InBev empire. With so many other producers of integrity out there, it makes giving even that $0.32 cents to any part of the evil beer empire too much.

Hello Christopher. Thanks for writing this. We (Houstonians/Texans) just lost our beloved Craft Brewery (Karbach) to AB/InBev and most folks are not taking it too well.
I don’t know if you need any additional fuel to flame this fire against the massive Goliath, but there are several restaurants, pubs, and beer hauses working to clear their Karbach inventory. Just an FYI if you were thinking of adding to this great article.

Hello,
could you please add Hasseröder to your list above? Like the Munich-based beers Löwenbräu-Spaten and Franziskaner, it is available in all of Germany and one of the bigger brabds there…not that some of your readers make a horrible mistake if they visit an Edeka or Rewe